During the last quarter of 2017, the price of cryptocurrency skyrocketed. Before the onset of 2018 cryptocurrency prices plummeted. Although prices since then have calmed down, activity in the blockchain is still spiking. There is a general shift in the sentiment and development in blockchain which is setting up the market positively. Here we will outline some of the main factors that could contribute to another boom in cryptocurrency in 2019.
Natural Market Cycles
Every market undergoes through a series of cycles before the market finally stabilizes. The cryptocurrency market is not different from other traditional markets in terms of general market shifts. Although this isn’t a perfect analogy for the cryptocurrency market, there are legitimate reasons to be optimistic about cryptocurrencies.
In fact, the combination of general price decline and strengthened fundamentals is a positive move for those thinking crypto futures. Market experts put it that a more stable low price with a stable utility is preferable. News fuels the Bullish/bear run in the financial market and their subsequent emotions on the financial markets. The cryptocurrency market is going to see another Bull Run based on emotions alone.
2020 Bitcoin Halving
Bitcoin mining reward is halving in 2020. Currently, mining reward is 12.5 BTC and this figure is slated to another 50 percent reduction by the year 2020. Halving mining rewards limits the amount of Bitcoin entering the market thereby preventing hyperinflation. Historically the last two Bitcoin Halving was accompanied by the new price increase. In the same sense, the next parabolic pump is not going to occur until the last quarter of 2020.
Meanwhile, it is not yet absolutely certain that the events will enroll as described holding on is preferable. This is because the upcoming halving is going to be factored in the price of Bitcoin as it occurred previously. Prices may even artificially inflate as early as 2019.
Positive Institutional Responses
For the first time in a long time, cryptocurrency received a positive response from institutional users globally. The development that was mostly fueled by the general acceptance of blockchain technology presented cryptocurrencies with the best chance. At the moment many financial organizations use cryptocurrency and blockchain for their business.
Obviously, the cryptocurrency revolution is not going to happen overnight but rather in a series of small steps. With the past events of 2018, cryptocurrency and blockchain technology will improve performance this year. The government crackdown of ICOs which at first seemed a little negative turn out as beneficial to the industry.
Basically, the market shifted from quantitative to qualitative ICOs. In 2018 SEC reached a decision to consider ICOs as securities. This led to the investigation of hundreds of ICOs and the realization of existing security laws.
Furthermore, the industry graduated Security Token Offerings (STOs) contrary to ICO, a more convincing approach to investors. Through STOs companies distribute tokens that actually represent a stake in the companies’ asset. Whereas ICOs distribute tokens that only realize their values once the project matures in accordance with its white paper.
On top of the introduction of STOs, the existing regulatory framework around securities is currently into reconsideration. This development alone might see ICO phasing out in 2019. Additionally more and more Big money investors are flooding the cryptocurrency industry with billions of investment dollars. Some of these names include Bakkt, an open source Bitcoin futures trading platform. Bakkt is backed up by the Intercontinental Exchange, the company behind the new york stock exchange. Other notable companies like Microsoft and Starbuck also partner with Bakkt.
Bakkt Trading Platform
Bakkt had to launch its Bitcoin futures trading platform in the last quarter of 2018. But due to multiple bottlenecks, the launch was rescheduled to the first quarter of 2019. Kelly Loeffler, the CEO of Bakkt, had this to say about the delay:
As is often true with product launches, there are new processes, risks and mitigants to test and re-test, and in the case of crypto, a new asset class to which these resources are being applied. So, it makes sense to adjust our timeline as we work with the industry toward launch.
Another Big money investor in the cryptocurrency space is Fidelity Digital Assets. This company basically open access to Bitcoin and Ethereum to institutional investors in October 2018. Since then the demand for more altcoins rise. In response scheduled the launch of Fidelity Digital asset services in the first quarter of 2019.
The platform gears towards bringing investors to access to the next 4 to 5 cryptocurrencies on the market-cap ranking. The platform would also aggregate exchange data and execute cryptocurrency trading. Other Events that make 2019 actually a better year for cryptocurrencies including the launch of subsidiary accounts for institutional investors by Binance and the Nasdaq who have a very high possibility of listing Bitcoin futures.
There are a lot of developments coming towards cryptocurrencies this year. Some of these development updates include updates on the Bitcoin core protocol and the Etheruem blockchain update.
The development of the lightning network is continuing with a fast pace towards adoption on the Bitcoin Blockchain. At the moment, the bitcoin network is able to handle only 7 transactions per second. This figure is slower than established payment platforms like Visa which does 24,000 transactions every second. Full implementation of the lightning network scheduled for 2019 will see bitcoin transaction speed increased.
On the other hand, the Ethereum network also has some upcoming amazing developments including scalability of the platform. The Upcoming Constantinople update scheduled on the ethereum blockchain is to take place on January 2019. The update aims to provide scaling solutions, the better process time for developers and improvement to the ethereum’s economics.
According to Glassdoor, the blockchain job market is all-time high despite the price drop of cryptocurrencies. Glassdoor said major corporations like IBM, J.P Morgan, and Oracle demand blockchain professionals. This development will most likely lead to functional improvements in Blockchain. This will further lead to support of the increasing institutional demand for digital assets.
The many blockchain and cryptocurrency developments underway imply the industry is at taking off. Just like any other industry, every new useful technology takes process before successfully becoming mainstream.
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